Bad news ahead for the American workforce: Its Millennial generation is flunking the basics.
Americans born after 1980 are lagging their peers in countries ranging from Australia to Estonia, according to a new report from researchers at the Educational Testing Service (ETS). The study looked at scores for literacy and numeracy from a test called the Program for the International Assessment of Adult Competencies, which tested the abilities of people in 22 countries.
The results are sobering, with dire implications for America. It hints that students may be falling behind not only in their early educational years but at the college level. Even though more Americans between the ages of 20 to 34 are achieving higher levels of education, they're still falling behind their cohorts in other countries. In Japan, Finland and the Netherlands, young adults with only a high school degree scored on par with American Millennials holding four-year college degrees, the report said.
"A decade ago, the skill level of American adults was judged 'mediocre,'" the report said. "Now it is below even that. Millennials, who will form the backbone of this nation's future, are not poised to lift us out of this predicament; in fact, the lack of adequate skills in this population has become a challenge for us to confront."
The results may stun Millennials, given their reputation for being tech-savvy idealists. Many of them are in college or are recent grads, and paying off heavy student debt burdens. Unfortunately, despite having the highest levels of educational attainment of any American generation, the group is falling far short of their peers in other countries.
Aside from being problematic for the Millennials themselves, the findings also raise questions about how this low-skilled generation will affect the U.S. economy. In an increasingly globalized world that rewards high-level skill sets, America's Millennials may find themselves losing out, especially as an income gap is developing between people with highly developed technical skills and every one else, the report noted.
"The skills of our Millennials -- our youngest cohort, who will be the workers, the decision-makers, and the parents of the next 40 years -- will also have cascading effects on every level of society," the report noted. "A very real danger lies in perpetuating a cycle where low skill levels, less income, and less access to quality education will beget a further entrenchment of deep inequality, with some segments of society more at risk than others."
It's no small matter for the American economy, given that the Millennial generation this year will surpass the baby boomers as the country's largest living generation, according to Pew Research. The Millennial cohort, which Pew estimates at 75.3 million people, is growing thanks to young immigrants, while the baby boomers, ages 51 to 69, are shrinking in number due to deaths.
Getting more Millennials into colleges might not be the solution to the problem. The report noted that the results suggest that this generation has passed through high school and college "without acquiring adequate skills."
"Policy makers and other stakeholders will need to shift the conversation from one of educational attainment to one that acknowledges the growing importance of skills and examines these more critically," the report said.
Half of American Millennials score below the minimum standard of literacy proficiency. Only two countries scored worse by that measure: Italy (60 percent) and Spain (59 percent). The results were even worse for numeracy, with almost two-thirds of American Millennials failing to meet the minimum standard for understanding and working with numbers. That placed U.S. Millennials dead last for numeracy among the study's 22 developed countries.
To top that off, despite their reputation for being tech-savvy, American Millennials also scored poorly on problem-solving in technology-rich environments, or PS-TRE for short. In that test, 56 percent of American Millennials failed to meet basic proficiency, again ranking them last among the 22 countries.
The results were surprising to the researchers, who told Fortune they thought the generation would score better than older workers.
"We really thought [U.S.] Millennials would do better than the general adult population, either compared to older co-workers in the U.S. or to the same age group in other countries," Madeline Goodman, an ETS researcher, told the magazine. "But they didn't. In fact, their scores were abysmal."